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Uzbekistan, Germany sign contracts for $ 4B

16 January 2019 18:30 (UTC+04:00)
Uzbekistan, Germany sign contracts for $ 4B

By Abdul Kerimkhanov

More than 10 protocols of intent and investment contracts totalling more than four billion euros were signed during German-Uzbek business forum held in Berlin on January 14.

Deputy Prime Minister of Uzbekistan, Chairman of the State Committee on Investments, Sukhrob Holmuradov, mentioned this at the conference.

According to representatives of the German business circles, the interest of German investors to Uzbekistan increased sharply after the new president of Uzbekistan, Shavkat Mirziyoyev, began to carry out large-scale reforms.

The Eastern Committee of the German economy, representing the interests of firms from Germany, working in the markets of Eastern European and Central Asian countries, speaks very positive about the reforms of the new president.

“For a long time for the German business, the economy of Uzbekistan was a kind of “black box,” said Klaus Mangold, the former chairman and now a member of the Presidium of the Eastern Committee. He added that German business circles have great interest and curiosity due to decisive changes over the past two years.

A few days ago, the World Bank introduced Uzbekistan among the countries most actively pursuing reforms. Mangold hopes that Uzbekistan will become a WTO member in 2019, which will significantly expand the opportunities of foreign investors.

The dynamics and speed of Uzbek reforms made a good impression on Berlin, said at the forum Eckhard Franz from the German Ministry of Economy and Energy.

He called monetary reform a decisive reform. As a result of this and other measures, said Franz, "we have witnessed such a boom in bilateral economic relations, which two years ago seemed completely impossible to us".

Uzbekistan shares with Moldova the second place among all post-Soviet countries with which bilateral trade with Germany in 2018 grew at the fastest pace. According to preliminary estimates, the volume of trade increased by about 16 percent compared with 2017. Moreover, exports from Germany and imports from Uzbekistan grew.

In absolute figures and in comparison with other countries that the Eastern Committee "supervises", trade with Uzbekistan still looks rather modest. Its volume for January-October 2018 amounted to 542 million euros. With Poland, for comparison, this figure equals 99 billion, with Russia - 52 billion, with Ukraine - 6 billion, with Kazakhstan - 4.5, with Azerbaijan - 1.5 billion.

The potential of Uzbekistan, according to the Eastern Committee, is incomparably greater. By population (33 million people), the country ranks first in Central Asia. In Soviet times, Uzbekistan was the most industrially developed republic of this region with highly skilled labor. The country has a rich resource base and cheap energy. In the free economic zones, there is a preferential tax and customs regime.

But from the point of view of investors, the Eastern Committee states that the biggest advantages of Uzbekistan are high GDP growth rates (5 percent in 2018), the prospects for higher profits, domestic demand and the possibility of exit from Uzbekistan to other markets in the Central Asian region with 60 million consumers.

Accessing the goods produced in Uzbekistan to the markets of, for example, Russia or Kazakhstan would be easier if this country joined the EAEU. But, Tashkent has not yet decided whether to take such a step, they are still weighing the pros and cons.

Speaking at the forum, Sukhrob Holmuradov called on German businessmen to pay attention primarily to such promising sectors of Uzbekistan’s economy, like chemistry, petrochemistry, pharmaceuticals, health care, construction materials, the agro-industrial complex and tourism.

Last year, the number of German tourists who visited Uzbekistan more than doubled. Now, visas for German citizens to travel to the country for no more than 30 days are no longer needed. But in the tourist centers - Samarkand, Bukhara, Khiva - there are not enough hotels, and the government of Uzbekistan, said Holmuradov, is ready to compensate part of investors' expenses for the construction of new hotels at the expense of the state budget.

The German businessmen - participants of the forum, of course, were interested in how irreversible the reforms in Uzbekistan were, whether there was a guarantee that the country would not return to the isolationist policies pursued by the former president.

“I want to assure our German friends, that Uzbekistan is firmly committed to the free market economy principles,” Sukhrob Holmuradov said.

He said Tashkent understands that without a truly open market economy, the country will face a hard fall. As an example, he cited the introduction of private ownership of land from July 1, 2019. Foreigners who have bought property in Uzbekistan are granted the right to receive a residence permit in the country.

Uzbekistan introduced a visa-free regime for German citizens visiting Uzbekistan for tourist purpose for 30 days from January 15, 2019.

This decision was made in order to strengthen cultural, scientific, educational exchange between countries, improve the investment climate and increase the tourist flow.

According to the amendments, visa-free visits to Uzbekistan for 30 days for tourist purposes will be introduced for citizens of Germany from January 15, 2019.

As many as 1,089 Germany citizens were issued entry visas through the e-visa system as of December 28, 2018, taking the 10th position among the countries whose citizens used the program.


Abdul Kerimkhanov is AzerNews’ staff journalist, follow him on Twitter: @AbdulKerim94

Follow us on Twitter @AzerNewsAz

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